Data & Analysis

Venture Capital‑backed Zymeworks Goes Public

I Stock 517743436

Vancouver-based Zymeworks (TSE/NYSE: ZYME) debuted on the public markets last Friday, just two weeks after announcing its intention to go public. The company raised CAD $79.7 million in the IPO from the sale of 4.5 million common shares at CAD $17 per share.

Zymeworks is a clinical-stage biopharmaceutical company dedicated to the discovery, development and commercialization of next-generation multifunctional biotherapeutics, initially focused on the treatment of cancer.

The company was among the top VC-backed companies in 2016 according to CVCA InfoBase data, ranking fourth overall in VC deals in Canada and sat as the top VC deal in western Canada. The ranking is rooted from a round of funding in January 2016. In that deal, Zymeworks raised CAD $87 million to support clinical development of its lead therapeutic candidates.

The IPO is yet another good sign for the Canadian public markets, following a bleak 2016 where IPO performance plummeted past the previous low-water mark set during the financial crisis of 2008, according to a PwC survey.

Lumira Capital, a Canadian life sciences venture capital investor, is one of a handful of Canadian VCs that backed Zymeworks and, according to Managing General Partner, Peter van der Velden, Lumira is extraordinarily proud of the Zymework team.

[We’re] glad to see the continuing re-emergence of Canada as home for best-in-class biotech companies,” said van der Velden, and, finally excited about the prospects for Zymeworks’ platforms creating new treatments for cancer patients.”

The Zymeworks IPO was the first VC-backed Canadian tech IPO since Ottawa-based Shopify (TSX/NYSE: SHOP) went public in 2015.

Pursuing an IPO is about both strategy and timing,” says van der Velden. In building a successful biotech, pursuing an IPO is rarely about liquidity in and of itself. More typically, it is about positioning the company for long term growth and access to deeper and broader pools of capital as the company continues to successfully execute its product development plans. This IPO was all about positioning Zymeworks for continued growth and success.”

Peter van der Velden also opened up about what initially attracted Lumira to the Zymeworks investment.

We started following the company over seven years ago when the business was more about using its platform to create product for pharma partners. We stayed close to the company believing that as they transitioned to developing proprietary products they would have the potential to be a world-class company. We invested as that transition became a reality.”

Zymeworks is the first VC-backed life sciences company to exit though an IPO since ProNai Therapeutics (now known as Sierra Oncology) (NASDAQ: SRRA) hit the public markets in July 2015. Peter van der Velden believes the successful Zymeworks IPO brings attention to the great things the sector is doing in Canada.

I think the Zymeworks IPO is part of a continuing and growing set of success stories in the sector in Canada. Like the acquisition of venture backed Cynapsus for $820M last year, and the US $172M financing and huge valuation increase six weeks ago for Lumira’s portfolio company Aurinia following outstanding phase II data, the Zymeworks IPO is just more growing evidence of the world recognizing the successful biotech companies being founded and built by Canadian entrepreneurs.”

If you would like to submit an idea for content, contribute to an article, or are interested in submitting an op-ed, contact CVCA’s editorial departmenthere.